The late winter and spring can be giving seasons, too.
Account holders of Schwab Charitable donor-advised funds (DAFS) granted out more dollars earlier in the year than ever before, according to an organization release. Greater than 420,000 grants worth just shy of $2 billion were distributed during fiscal year 2018, ending on June 30. The dollar sum represents a 20-percent increase over 2017’s total of $1.6 billion.
The charities most supported by dollars facilitated by the San Francisco, Calif.-based organization were Feeding America, The Red Cross, Planned Parenthood, The Salvation Army, and Doctors Without Borders.
The grant distribution represents a more-than twofold increase over 2014’s $822 million. Grants have consistently climbed during that span from just over $1 billion in 2015 to $1.18 billion in 2016 to $1.6 billion in 2017. Schwab Charitable donors have now recommended $10 billion in grants to 130,000 charities since the organization’s inception 20 years ago, according to the announcement.
Though the 20-percent year-to-year increased continued the organization’s upward trend, it was dwarfed by the percentage increase of grants that were recommended in the first half of 2018. From January through June of 2018, more than $925 million in grants were recommended, a 40 percent increase over the same period in 2017.
As questions about how the economy and tax reform will influence giving mount, Schwab Charitable is now the second DAF facilitator to report a strong start to 2018. In March, Fidelity Charitable of Boston, Mass. reported that it took grantmakers only from Jan. 1 to March 13 to grant the year’s first $1 billion. The milestone took until mid-April in 2017, representing a 42-percent increase as compared to 2017’s pace.
Some fundraising experts have predicted that DAFs may become increasingly popular among middle-tier donors that might have lost the benefits of itemizing their tax deductions following the doubling of the standard deduction’ to $24,000 for joint filers. “Bunching and smoothing” is a concept in which a donor that might, for example, give $10,000 per year instead frontloads $30,000 into a DAF, itemizes, and then grants out dollars over the next few years while taking the standard deduction. The cycle then repeats.
“Despite the volatile start to 2018, donors continue to rely on the convenience and tax efficiency of their donor-advised fund accounts to give highly appreciated assets to charity,” said Kim Laughton, president of Schwab Charitable. “And while time will tell how the new tax law affects charitable giving, the strong start to 2018 suggests that our philanthropically-minded donors will continue giving generously even in this new tax and market environment.”